Low-cost Housing Gets A Boost

Loan Program Builds On A New Attitude

May 10, 1994|By Robert Becker, Tribune Staff Writer.

DuPage Housing Authority board members hope at their monthly meeting next week to finalize plans for the creation of a private, non-profit subsidiary of the agency to make loans available to builders of affordable housing.

Authority board Chairman John Day said board members approved the idea at the authority's meeting last month and hope to have the legal details worked out in the next few weeks.

In past years, critics have lambasted the authority, which is charged with overseeing subsidized housing in the county, for its lack of leadership in addressing the housing problems of the needy.

They pointed to the public agency's million-dollar surplus and what they claimed is an apparent disinterest in spending any portion of that money for affordable housing. They charged that the authority was, at best, stodgy in its attitude toward the county's housing problems.

But a year after a purge and restructuring of the top leadership of the authority, the criticism has largely stopped, replaced with accolades from even the agency's harshest critics.

"You can't imagine the difference," said Bernard Kleina, executive director of Hope Fair Housing in Lombard. "Matters now get resolved with a phone call rather than a lawsuit."

Day said the newly created branch of the agency-the first of its kind in DuPage, according to officials-will fund loans through the sale of bonds, the proceeds of which the authority would make available to builders at attractive rates.

Day said while some of the details remain to be finalized, he envisions loans generally no larger than $5 million. Projects could range from single-family homes to small multifamily dwellings scattered throughout the county.

Though there would be income restrictions on the residents of buildings financed by the authority, there would no requirement that occupants be participants in the U.S. Department of Housing and Urban Development's Section 8 program.

Day also said single-family homes built with authority help would ultimately be sold to private owners.

He said the money raised by the authority could also be pooled with federal funds or money from other non-profit agencies to help fund projects.

"It's another step for us," said Day, who has overseen the revamping of the authority. "We see it as a tool that we can use to bring more affordable housing to the county."

There is little debate over the need for such housing. According to HUD figures, approximately 24,000 low- and moderate-income renters in DuPage County spend more than 30 percent of their income on housing costs. HUD defines paying 30 percent of monthly gross income on rent as a burden.

Board members say the decision to use authority clout and resources for funding construction represents a change in the "corporate culture" of the agency.

"The finance corporation is going to allow us to do the things we've always talked about," said DuPage County Board member Edward Merkel, a Republican from Elmhurst, who also serves on the housing authority board. "It lets us be proactive."

"It's a breakthrough," said Robert Christ, housing activist and president of DuPage Home Ownership Center in Wheaton. "It shows the new leadership that's taken over there."

"Going in this direction, the authority is going to be one of the best in the state," said Kleina.

While new for DuPage County, programs to unite the bonding power of public agencies with entrepreneurial power of the private sector have flourished around the Chicago area and country.

John C. Murphy, executive director of the Association of Local Housing Finance Agencies in Washington, D.C., said that when federal money for construction dried up in the 1970s and 1980s, agencies had to become more creative. Since then, he said, billions have been made available for housing through programs similar the one starting in DuPage.

"The DuPage Housing Authority ought to be congratulated," said Murphy. "It's very much the wave of the future."

The shift is a major step in the agency's efforts to assume a higher profile housing role. "No more lip service," vows Day. "We want to do something."

In the last year, the Housing Authority has moved to mend fences with DuPage housing advocates, formulating a strategic plan and adopting a new mission statement.

The redefinition of the mission came after months of infighting that resulted in the departure of former executive director Elaine Libovicz.

Libovicz, who oversaw authority operations for nearly 10 years, clashed with Day and other board members as they tried to enlarge the authority's scope beyond managing 1,500 federal rental subsidies that are part of the Section 8 program.

Libovicz, who was demoted in February and then resigned last June, was replaced with Zirl Smith, former head of the Chicago Housing Authority.

Smith, who was hired to head the agency temporarily, has been resoundingly praised for his management of the authority. But despite repeated offers from board members, Smith has declined to accept the job permanently. A nationwide search is currently under way.

Under the new financing plan, Day said, the authority would raise money for a specific project rather than have a pool of funds available. He said providing such financing fills "an important niche," providing loans for construction projects that do not always interest other financial institutions.

He said his informal discussions with people interested in building affordable housing in the county lead him to believe there is a need.